the influence of good governance, government internal ... · performance and professionalism of...

IOSR Journal of Business and Management (IOSR-JBM)

e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 20, Issue 3. Ver. VI (March. 2018), PP 60-79

www.iosrjournals.org

DOI: 10.9790/487X-2003066079 www.iosrjournals.org 60 | Page

The Influence Of Good Governance, Government Internal

Control System, Budgeting Participation And Remuneration On

Managerial Performance with Organizational Commitments

Moderating Variable(Empirical Studies In The 8 UPT

Directorate General Of Early Childhood Education And

Community Education Ministry Of Education And Culture)

Frida Nurcahyani1, Endar Pituringsih

2, Rr. Sri Pancawati

3

1Economic Accounting,Mataram University, Indonesia

2Economic Accounting,Mataram University, Indonesia

Corresponding Author: Frida Nurcahyani1

Abstract:This study aimed to analyze the influence factors on Managerial Performance. The influence factors

is Good Governance, Government Internal Control System, Budgeting and Remuneration Participation with

Organizational Commitment as a moderating variable in 8 of Technical Implementation Unit Directorate

General of Early Childhood Education and Community Education Ministry of Education and Culture.This

research is quantitative associative with data analysis techniques using Structural Equation Model -Partial

Least Square (PLS-SEM) with Smartpls 2.0. The data used is primer data. Data was collected by using a

questionnaire. The results showed that Good Governance, Government Internal Control System and Budgetary

Participation Affect on Managerial Performance. While Remuneration has no effect on Managerial

Performance. In this study also found that Organizational Commitment can only moderate the relationship

between Good Governance with Managerial Performance. Organizational Commitment can not moderate the

relationship between the Government's Internal Control System, Budgetary Participation and Remuneration for

Managerial Performance.This research may contribute and input to government institutions that managerial

performance improvement can be made by applying the enhancement of good governance, participation

budgeting, optimal implementation of internal control systems government and remuneration accompanied by a

commitment to the organization.The implications of this study are useful for policy holders in government in

formulating policies related to performance improvement in the public sector related to the implementation of

Good Governance, Government Internal Control System, Participation in Budgetingand Remuneration.

Keywords: Good Governance, Government Internal Control System, Budgetary Participation, Remuneration,

Managerial Performance, Organizational Commitment

------------------------------------------------------------------------------------- --------------------------------------------------

Date of Submission: 26-02-2018 Date of acceptance: 17-03-2018

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I. Introduction

The performance of the public sector increased in line with the implementation of Reforms in all

Ministries /Agencies. Government to answer the demands of society with the reform that has been done since

the crisis of 1998 or more multidimensional than the last ten years that has successfully laid the political

foundation for democratic life in Indonesia. Various changes in the system of state administration, the

revitalization of high state institutions and elections conducted in order to establish the state government that is

capable of running (good governance). In the case of the embodiment of a clean government and free from

corruption, collusion and nepotism, there are many many things to be done in terms of fighting corruption. This

is partly shown by the data of Transparency International in 2009, the Corruption Perceptions Index (CPI) of

Indonesia is still low (2.8 out of 10) when compared with countries in Southeast Asia (Presidential Decree 81,

2010).

One important aspect of the reform is the structuring of management bureaucratic central and local

governments (provincial, district, city). It is considered important partly because of the success of a policy is

determined also by the ability of management in the civil service to implement the policy efficiently and

effectively. All activities within the government agencies will be measured in terms of the accountability of

performance, both in terms of individual performance, the performance of work units and performance of

institutions, and even the overall performance of the government. Thus, the implementation of the activities at a

The Influence Of Good Governance, Government Internal Control System


government agency, from planning, implementation, monitoring, up to the responsibility, should be conducted

in an orderly, controlled, and efficient and effective.

This is consistent with the perspective of the theory of goal setting (goal setting) Locke (1968), the

purpose plays an important role in the act. Clear objectives and measurable energy is needed to prevent the

spread of organizational By detailing long-term goals and short-term organization, the ambiguity of employees

to organizational goals will decrease, so as to focus on the completion of a given task. Goal setting clear,

measurable, and challenging demands of employees to work better. Employees who know what the objectives of

the organization will be motivated to do more business and ultimately improve performance.

Presidential Regulation No. 81 2010 on Grand Desaign Reforms Year 2010-2025 mandates entire

Ministries and Local Government to conduct bureaucratic reform. Ministry / Agency to conduct bureaucratic

reform that has been awarded in the form of performance benefits.Performance benefits granted in stages

according to the success / achievement of bureaucratic reform. In the grand design of bureaucratic reform wave

2 (two), which attracted the attention of the public in general interpret the remuneration or allowances lively

performance given by the agency on the Civil Service, not on area changes proposed in the road map

bureaucratic reforms (RMRB). Substantially, the public should be more sensitive to the changes proposed area

of reform of the bureaucracy to oversee and examine the extent of success achieved by the government,

especially in contact with public services. The essence of bureaucratic reforms expected by the government can

realize the delivery of good governance, public service quality, capacity and accountability of bureaucratic

performance and professionalism of human resource (regulation 81 th 2010).

In keeping with these ideas, the government faced with the reality that the repercussions of bureaucratic

reform is more viscous meaning in essence remuneration, and is implicated in every government agency is no

exception either central or regional institutions. The Respond such phenomena will become commonplace when

any bureaucratic reform shade agency to pursue the remuneration that supposedly will be the trigger to the

performance of the government bureaucracy instead of focusing on improving its performance. If this

phenomenon becomes legitimacy to the organizers of the government or the government bureaucracy would be

contra-productive, when not offset by significant changes in the organization. Changes need to be made whether

each agency has done a good arrangement of institutional, resource management and employees, it is becoming

important as -aspek aspect of the untouched and only the pursuit of performance benefits, then the inefficiency

of the organization.

The phenomenon of remuneration accompanied by increased public awareness of the public

administration of trigger turmoil rooted in dissatisfaction. Higher demands submitted to the accountability

provided by the trust state officials mandated to them. In other words, the performance of government agencies

are now more under the spotlight, because people are starting to question the benefits they receive for services

of government agencies.

The spirit of reform has colored the utilization of state apparatus with demands for realizing the state

administration that is able to support the smooth and integration of the tasks and functions of state governance

and development, by practicing the principles of good governance. Effective good governance requires the

existence of "alignment" (coordination) is good and integrity, professional and work ethic and morale high. The

implementation of good governance is a key prerequisite for realizing the aspirations of the community in

achieving the goals and ideals of the nation and the state. In order to this, required the development and

implementation of appropriate systems of accountability, clear and evident that governance and development

can take place in efficient, effective, clean and accountable and corruption-free (Sedarmayanti, 2012).CPC

within the financial audit was also conducted an examination of the Internal Control System (SPI) and

compliance with laws and regulations. So that the generated report on there are three kinds of financial audit,

namely Inspection Report (LHP) to the Financial Statements, LHP on SPI, and LHP on Compliance with Laws

and Regulations.

The study also wants to examine further to several studies showing that less significant results using

organizational commitment as moderating variables. Trisnaningsih (2007) which concluded that the

understanding of Good Governance have no direct impact on the performance of auditors. Desmiyawati and

Azkina (2013) also concluded that in partial accounting control system but organizational commitment can not

act as a moderating. Denny (2015) concluded that the participation budgeting to a significant negative effect on

managerial performance. While the research results Arumawan and Sutikno (2015) also showed that the

remuneration does not affect the performance of civil servants.

The first issue is whether the formulation of Good Governance, Government Internal Control System,

Participation Budgeting and Managerial Remuneration affect performance. While the second formulation of the

problem is whether the Organizational Commitment may moderate the relationship between good governance,

Government Internal Control System, Budgeting and Remuneration Participation in Managerial

Performance.The purpose of this study is to demonstrate empirically: First, the influence of Good Governance,

Government Internal Control System, Budgeting and Remuneration Participation on Managerial Performance.



Second, Organizational Commitment moderate the relationship between good governance, Government Internal

Control System, Budgeting and Remuneration Participation on Managerial Performance.The benefits expected

to be obtained through this research are: first, to contribute empirically in the field of public sector accounting in

particular to the development of literature in the implementation of the concepts of Good Governance, Internal

Control System of the Government, Participation Budgeting and remuneration in order to increase Managerial

Performance Government as a form of accountability to the people / society.

Secondly, as an entry in the leadership of public sector organizations in particular Head of Unit in the

Directorate General ECD and Dikmas relating to the implementation of Good Governance, Internal Control

System of the Government, Participation Budgeting and remuneration in order to increase Managerial

Performance in government agencies in an effort to improve public services optimal ,Thirdly, it can be used as

input and consideration for policy holders and Leadership Unit in setting policies related to Good Governance,

Government Internal Control System, Budgeting and Remuneration participation in order to improve managerial

performance. This is in accordance with the mandate of bureaucratic reforms carried out in the Ministry /

Agency.Fourth, as a reference for writers and other interested parties circuitry studies on Good Governance,

Government Internal Control System, Budgetary Participation, Managerial Remuneration and Performance.

II. Theoretical Framework and Development Of Hypothesis Theoretical Framework

Viewed from the standpoint of stewardship theory, the manager will behave according to common

interests. When the steward and owner's interests are not the same, the stewards will try to cooperate rather than

oppose it, because the stewards felt common interests and behave in accordance with the behavior of the owner

(Raharjo; 2007). Stewardship Theory assumes that the interests of the people can be maximized by dividing

(shared) powers, rights and obligations between the role of supervisor / investigator and management, resulting

in the Stewardship Theory states that executives tend to be more motivated to act in the corporate interests than

the interests of their own (Hunger, Wheelen, 2004).

Thus, if the principal and agent pick relationship management (Stewardship), the result is a relationship

that really matters that are designed to maximize the potential of group work, as well as the principals choose to

create a situation of management oriented to the empowerment and delegation of authority is likely to deliver

better performance (Donalson, Davis; 1991).

As a form of accountability for the authority given, the stewards (agent) provide accountability reports

to the principal. Mardiasmo (2004) explain that the definition of public accountability as the obligation of a

fiduciary (agent) to provide accountability, serving, reporting, and disclose all activities and the activities they

are responsible to the grantor trustee (principal) who has the right to ask those responsible.

In the public sector organizations budgeting participation plays an important role in improving

organizational performance and to produce high-quality decisions. That's because if the budget is prepared /

designed participatory accommodate all the programs contained in the unit, causing a high commitment unit

leaders work to achieve organizational goals it has set for his involvement in the budgeting process.

Internal control in the government, including K / L and local governments designed by referring to

Government Regulation No. 60 Year 2008 concerning the Government Internal Control System (SPIP). In the

implementation of SPIP formed units of the Internal Control Unit (SPI), which serves to monitor the

performance of work units to be run effectively and efficiently and accountable in accordance with the

regulations. While the strengthening of performance accountability aims to improve the capacity and

accountability of the performance of the bureaucracy that is supported by the involvement of the leadership and

management accountability. Accountability of performance is the embodiment of the obligations of a

government agency to take responsibility for the success / failure of the implementation of programs and

activities in achieving the organization's vision, mission and objectives.

Motivated by the awareness at the same time the government's commitment to bring clean and good

governance, the government provides remuneration. With the expected remuneration the employee payroll

system that is fair and reasonable. Remuneration is income other than the salary given to an employee who is

active based on competence and performance. Remuneration of the key to the successful implementation of

bureaucratic reform to increase the motivation of employees as a reward for performance to meet the target as

an incentive motivation for improving performance. Similarly remuneration, employee welfare improvement

linked to individual performance and organizational performance.

This is consistent with the theory of goal setting (goal setting theory) where the person's behavior is

determined by two cognitions that values and intentions (or destination). Values are what determine the goal for

his behavior in the future and these goals will affect actual behavior. Using a theory goal good employee

performance in public service delivery was identified as the destination including managers related to

managerial performance (Arifin and Rohman, 2012).



Based on a literature review of the above, it is assumed that good governance, internal control systems

of government, budgetary participation and remuneration affect the performance of managerial and

organizational commitment is assumed to strengthen the effect of moderating variables as described in the

conceptual framework in Figure 2.1.

Stewardship Theory

Mulyawan (2009), Amelia, dkk (2012), Susanti (2014),

Zeyn (2011) dan Trisnaningsih (2007)

Stewardship TheoryAllen dan Meyer (1990), Darma (2004), Sardjito &

Muntaher (2007), Tanti dan Douk (2008), Ilyas (2009),

Herlin (2010), Zeyn (2011), Ahmad (2015)

Stewardship TheoryDramawan (2004), Sari

(2004), Rina (2012), Azlina (2012), dan Putri (2013)

Goal SettingTheoryKenis (1979), Sardjito dan Muntaher

(2007), Soetrisno (2010), Fibrianti dan Raharja (2013), Kewo (2014), Baiq

(2015) dan Denny (2015)

Goal Setting TheoryPalagia, dkk (2012), Ahmad

(2015), Arumawan dan Sutikno (2015)

H3

H2

H4

Managerial Performance(Y)

Good Governance(X1)

Government Internal Control System (SPIP)

(X2)

Budgeting Participation(X3)

Remuneration(X4)

Organizational comittment(M)

Figure 2.1:conceptual framework

Development Of Hypothesis

Effect of Good Governance to Managerial Performance

In the context of stewardship theory, the relationship between government and society can be described

as a relationship Stewardship, where the government serves as an agent who is authorized to perform certain

obligations prescribed by the community as the principal, either directly or indirectly through their

representatives. In a stewardship relationship standpoint, as a government agent must carry out what the

interests of society as a principal.

Implementation of Good Governance in the bureaucracy reform is absolutely necessary in view of good

governance requires good management in an organization. One of the benefits that can be learned is the

increased performance through the creation process of making better decisions, improve operational efficiency

and further improve service to the public. Good governance is a form of government responsibility as an agent

of the public as principal.

Mulyawan (2009); Amelia, et al (2012); and Susanti (2014) conducted a study on the Influence of

Good Governance on Organizational Performance. The results showed there is an influence on the

implementation of good governance on Organizational Performance. While Zeyn (2011) concluded that the

Good Governance a significant effect on the financial accountability moderated by organizational commitment.

It is different Trisnaningsih concluded from the study (2007) which states that an understanding of Good

Governance have no direct impact on the performance of auditors.

H1: Good Governance effect to Managerial Performance

Effect of Government Internal Control System (SPIP) to Managerial Performance

Internal control in the government, including K / L and local governments designed by referring to

Government Regulation No. 60 Year 2008 concerning the Government Internal Control System (SPIP). In the

implementation of SPIP formed units of the Internal Control Unit (SPI), which serves to monitor the

performance of work units to be run effectively and efficiently and accountable in accordance with the

regulations. While the strengthening of performance accountability aims to improve the capacity and



accountability of the performance of the bureaucracy that is supported by the involvement of the leadership and

management accountability.

Stewardship Theory assumes that the interests of the people can be maximized by dividing (shared)

powers, rights and obligations between the role of supervisor / investigator and management, resulting in the

Stewardship Theory states that executives tend to be more motivated to act in the corporate interests than the

interests of their own (Hunger, Wheelen, 2004).

Research on Government Internal Control System made by Putri (2013); Rina (2012) and Sari (2011).

The results showed that the Government Internal Control System berpengruh positive to the Managerial

Performance. In contrast to that done Darma (2004) and Desmiyawati and Azlina (2012) who studied

Accounting Control System on Managerial Performance with Organizational Commitment as moderating

variables. It can be concluded that in partial accounting control systems and a significant positive effect on

managerial performance but variable commitment not ogranisasi can not act as a moderating the relationship

between accounting control systems and managerial performance.

H2: Government Internal Control System influence on managerial performance.

Effect of Budgetary Participation on Managerial Performance

Budgetingparticipation in public sector organizations play an important role in improving

organizational performance and to produce high-quality decisions. That's because if the budget is prepared /

designed participatory accommodate all the programs contained in the unit, causing a high commitment unit

leaders work to achieve organizational goals it has set for his involvement in the budgeting process.

In the theory of goal setting one of the factors that influence the goal setting is participation

(participation) where the idea of participative management lies in the idea of involving employees in setting

goals and making decisions, so as to encourage employees to develop objectives and have the initiative to obtain

information about what is happening in elsewhere in organisasi.Dengan that way, employees feel confident that

the overall organizational objectives consistent with the vision and mission.

Kenis (1979) test on the effect of budgetary Goal Characteristic of the Behavior and Managerial

Performance. The results showed that budget participation has positive influence on managerial performance.

Sardjito and Muntaher (2007) found that: (1) a significant difference between partisiapsi budgeting to

performance governmental authorities and regions there is significant influence between the variables of

organizational commitment in moderating the budgeting participation with the performance of local government

officials. Variable participation budgeting,organizational commitment, and performance of governmental

authorities in the area of research and Muntaher Sardjito (2007) supported this study, where the variable

organizational commitment serve as a moderating variable.

Sutrisno (2010) concluded that the simultaneous participation in budget preparation and delegation of

authority has a significant positive effect on managerial performance. Fibrianti and Riharjo (2013) concluded

that budget participation, decentralization, organizational commitment, and environmental uncertainties

significant positive effect on managerial performance. Kewo (2014) concluded that partial and simultaneous

budgetary participation, budget goal clarity, and internal control system in a positive effect on managerial

performance.

Results Baiq study (2015) showed empirical evidence that the participation budgeting, organizational

commitment and work motivation influence on managerial performance work units religious ministry regional

office of West Nusa Tenggara province throughout the island of Lombok. While research Denny (2015) showed

that simultaneous variable budget participation, budget goal clarity and professionalism of human resources

influence on managerial performance SKPD NTB regional government. Partially budget goal clarity and

professionalism of human resources is a significant positive effect of participation budgeting while a significant

negative effect. The results of different studies where budget participation showed a significant negative effect

will be examined further in this study by using the following hypothesis:

H3: Participation Budgetary effect on Managerial Performance.

Effect on Performance Managerial RemunerationRemuneration of the key to the successful

implementation of bureaucratic reform to increase the motivation of employees as areward for performance to

meet the target as an incentive motivation for improving performance. Similarly remuneration, employee

welfare improvement linked to individual performance and organizational performance.

This is consistent with the theory of goal setting (goal setting theory) where the person's behavior is

determined by two cognitions that values and intentions (or destination). Values are what determine the goal for

his behavior in the future and these goals will affect actual behavior. Using a theory goal good employee

performance in public service delivery was identified as the destination including managers related to

managerial performance (Arifin and Rohman, 2012).



The influence of remuneration to performance has been investigated by Palagia et al (2012) to study the

Tax Administration of Makassar. The results showed that (1) the remuneration, motivation and job satisfaction

affect the performance of employees at the tax office in the City (2) Rernunerasi, motivation and job satisfaction

in a dominant variable influence on the performance of employees at the tax office in Makassar.

Ahmad (2015) conducted research on the influence of participative budgeting on managerial

performance: test the role of organizational commitment, locus of control, job relevant information and

remuneration. The results of this study indicate that the participatory budget has positive influence on

managerial performance, but not statistically significant, mediating organizations komitmcn participative

budgeting influence managerial performance. The study found no effect of locus of control and job relevant

information pengarnh mediate participative budgeting on managerial performance, while rernunerasi not

moderate participative budgeting influence managerial performance, but remuneration has a positive and

significant influence statistically on managerial performance.

Arumawan and Sutikno (2015) conducted a study on civil servants in the unes. For educators research

results showed that motivation and job satisfaction affect the performance of civil servants, but competence,

discipline and remuneration does not affect the performance of civil servants. As for the civil faculty research

results demonstrate competence, motivation and job satisfaction affect the performance of civil servants, but the

discipline and remuneration does not affect the performance of civil servants. Variable remuneration in this

study is used to endorse the study authors where the results of studies showing the remuneration does not affect

the performance of civil servants will be examined further in this study by using organizational commitment as

moderating variables.

H4: Remuneration influence on Managerial Performance

Organizational commitment moderates the influence of good governance, the Government Internal Control

System, Budgeting and Remuneration Participation on Managerial Performance

In the public sector organizations implement employee commitment on the implementation of the work

program that has been determined. Based on the theory of goal setting, employees are committed to the

organization will be more concerned with the interests of the organization rather than personal interests. Goal-

setting process should be understood to be effective where employees are more likely to have a purpose if you

feel as part of the purpose of creation.The process of setting the goal of creating positive conditions when the

values of the organization support the development of its employees and their chance to put forward thinking

organization (Robbins, 2008: 239). Strong organizational commitment is reflected in the strong commitment of

the leadership of the organization and employees in achieving organizational goals as well as more concerned

with the interests of the organization above personal interests and interest groups.

Organizational commitment indicates a power of a person to identify his involvement in a part of the

organization (Mowday et al. In Vandenberg, 1992). Organizational commitment is built on trust workers on the

values of the organization, the willingness of workers to help realize the goals of the organization and loyalty to

remain a member of the organization. Therefore, organizational commitment will create a sense of belonging

(sense of belonging) to the workers of the organization. If workers feel his soul be bound by organizational

values are there then he will feel happy in their work, so it has a responsibility and awareness in running the

organization and are motivated to report all activities to implement voluntary public accountability, including

financial accountability and performance can be increased.

Research on organizational commitment both as independent variables as well as the moderating

variable is done by Ilyas (2009); Tunti and Douk (2008). Results of both studies showed that there is a positive

and significant impact on Managerial Performance. It was also confirmed by Keller (1997) in Darma (2004)

which states that a high organizational commitment significantly influence performance. Sardjito and Muntaher

(2007) concluded that there is significant influence between the variables of organizational commitment in

moderating the budgeting participation with the performance of local government officials.

Sumarno (2005) examined the effect of organizational commitment and leadership style on the

relationship between budgetary participation and managerial performance. The results showed the effect of

organizational commitment on the relationship managerial performance and participation is positive and

significant budget. Sardjito and Muntaher (2007) concluded that there is significant influence between the

variables of organizational commitment in moderating the budgeting participation with the performance of local

government officials.

Ahmad (2015) conducted research on the influence of participative budgeting on managerial

performance: test the role of organizational commitment, locus of control, job relevant information and

remuneration. The results of this study indicate that the participatory budget has positive influence on

managerial performance, but not statistically significant, organizational commitment mediates the influence of

participative budgeting on managerial performance.

H5: Organizational commitment moderates the influence of good governance on Managerial Performance



H6: Organizational commitment moderates the influence of Government Internal Control System on Managerial

Performance

H7: Organizational commitment moderates the influence of Budgetary Participation on Managerial

Performance

H8: Organizational commitment moderates the influence of Remuneration on Managerial Performance

III. Material and Method

This research is a quantitative associative.The study was conducted on 8 Technical Implementation Unit (UPT)

in the Environment Directorate-General of Education and Early Childhood Education. Basic research is the

choice of location is based on the consideration that:

1. An Agenda for Reforms Ministry of Education and Culture form of structuring the management of which is

aimed at establishing good governance;

2. Planning and budgeting at Directorate General of Early Childhood Education and Community Education

Ministry of Education and Culture and 8 Technical Implementation Unit prepared with a bottom up and top

down with the involvement of all the Task Force and all the devices. Top down approach implies that this

plan also consider the availability of the budget in accordance with the budget estimates. In terms of

implementation, bottom-up approach is made to obtain a picture of the funding needs in order to create

ideal conditions;

3. Each Technical Implementation Unit at Directorate General of Early Childhood Education and Community

Education Ministry of Education and Culture has established the Internal Audit Unit (SPI);

4. All Technical Implementation Unit at Directorate General of Early Childhood Education and Community

Education Ministry of Education and Culture have received performance benefits (remuneration) in

accordance with the class positions.

Study Duration: Marc to April 2017

Population: The population in this study are all Echelon II, III and IV Structural Officials who perform

managerial function at 29 Technical Implementation Unit at Directorate General of Early Childhood Education

and Community Education which amounted to 105 people.

Sample size: 46 Structural Officer

Sample Classification:The sampling technique in this study using nonprobability sample selection sampling by

purposive sampling, the sample selection techniques with particular consideration (Sugiyono, 2013: 85).The

criteria in the selection of samples in this study are:

1. The structural Officials on the Technical Implementation Unit at Directorate General of Early Childhood

Education and Community Education that who have applied the principles of good governance;


Education and Community Education who has performed the Government Internal Control System (SPIP)

function;


Education and Community Education who has made the budget;

4 The structural Officials on the Technical Implementation Unit at Directorate General of Early Childhood

Education and Community Education who has received remuneration;

All structural officer (Echelon II, III and IV) is the organizer of managerial functions in good working unit level

managerial functions top, middle and lower.

Based on the criteria of the sample in this study amounted to 46 people :

Table 1: Structural Position in 8 Technical Implementation Unit at Directorate General of Early Childhood

Education and Community Education No Structural Officer Number of Responden

1 Eselon II 2

2 Eselon III 10

3 Eselon IV 34

Amount 46

Reseach Variable

The research variables in this study can be classified into:



1. Exogenous variables are variables that are not influenced by other variables in the model. Exogenous

variables in this study are Good Governance (GG) and Government Internal Control System (SPIP).

Budgetary Participation (PPA) and Remuneration (R).

2. Endogenous variables are variables that are influenced by other variables in the model. Endogenous

variable in this research is Managerial Performance (KM).

3. Moderating variables are variables that can strengthen or weaken the influence of exogenous variables on

endogenous variables. The moderating variable in this research is Organizational Commitment (KO).

Procedure methodology

In this study, the data used are primary data. Primary data is the source of data that directly provide

data to data collectors (Sugiyono, 2013; 137).Primary data collection was obtained by giving a questionnaire

(mail quesioner) which contains a list of structured questions addressed to the respondents namely Echelon III

and IV officials in the Directorate General of Early Childhood Education and Community Education.Data

collection using a questionnaire containing a list of structured questions directed to respondents.

Measurement of instruments in each variable Good Governance and Government Internal Control

System, Budgetary Participation, Remuneration, Organizational Commitment and Managerial Performance by

using Likert Scale. With the scale of assessment (score) 1 to 5 to measure the extent to which the influence of

independent variables on the dependent variable. Each variable is given a list of questions taken from the

questionnaire. Then each answer option is given a value of 1 for negative extreme answers and a 5 for a positive

extreme answer.

Statistical analysis

This study uses a technical analysis of SEM (Structural Equation Modeling) approach Partial Least

Squares (PLS). Data analysis and hypothesis testing in this research using Structural Equation Model - Partial

Least Square (SEM-PLS) method with Smartpls 2.0. Partial Least Square is a powerful factor indeterminacy

analysis method because it does not assume data must be by a certain scale measurement, the number of small

samples. PLS can also be used to confirm the theory (Gozali, 2006; 30).Stages analysis using PLS-SEM

through five (5) stages wherein each stage of the process will affect the next stage (Ghozali and Latan, 2015:

47), namely:

1. Conceptualization models. At this stage, researchers must develop and construct measurement. At this

stage, steps are designing models struktrual (inner model) and a measurement model (outer model).

2. Determine the method of analysis of algorithms There are three schemes provided that factorial, and the

path or structural controid weighting. PLS algorithm scheme suggested by Wold is the path or structural

weighting.

3. Determine the resampling method. Generally there are two (2) resampling methods used by researchers in

the field of SEM are bootstrapping and jacidefijing to determine the value of t. This study uses

bootstrapping method is more often used in the model equations stmktural to perform resampling.

Bootstrapping method using all the original samples to perform resampling.

4. Draw a path diagram. Path diagram in this study can be described as follows:



PR

AH

TR

RP

BK

K

EE

AK

BS

SPIP_LP

SPIP_PR

SPIP_KP

SPIP_IK

SPIP_PPI

KOP

KEP

ARA

UA

PA

FB

RCK

RK

λ2

λ3

λ4

λ5

λ6

λ7

λ8

λ9

λ10

λ11

λ12

λ13

λ14

λ15

λ16

λ17

λ18

λ19

λ20

λ21

λ22

ƴ1

ƴ2

ƴ3

ƴ4

KOID KOKL KOL

λ23 λ24 λ25

KMPR KMI KMK KME KMP KMPW KMN KMPS

λ25 λ26 λ28 λ29 λ30 λ31 λ32λ27

λ1

GG

SPIP

R

PPA

KM

KO

KO * GG

KO * SPIP

KO * PPA

ID * PRID * AHID * TRID * RPID * BKID * KID * EEID * AKID * BS

KL * PRKL * AHKL * TRKL * RPKL * BKKL * KKL * EEKL * AKKL * BSL * PRL * AHL * TRL * RPL * BKL * KL * EEL * AKL * BS

KO * R

ID * SPIP_LP

ID * SPIP_PR

ID * SPIP_KP

ID * SPIP_IK

ID * SPIP_PPI

KL * SPIP_LP

KL * SPIP_PR

KL * SPIP_KP

KL * SPIP_IK

KL * SPIP_PPI

L * SPIP_LP

L * SPIP_PR

L * SPIP_KP

L * SPIP_IK

L * SPIP_PPI

ID * KOPID * KEPID * ARAID * UAID * PA

ID * FBKL * KOPKL * KEPKL * ARAKL * UAKL * PA

KL * FBL * KOPL * KEPL * ARAL * UAL * PA

L * FB

ID * RCK

ID * RK

KL * RCK

KL * RK

L * RCK

L * RK

Figure 2 Structural Model and Measurement

Information:

GG = latent variable of Good Governance

SPIP = latent variable of SPIP

KM = latent variable of Managerial Performance

KO = variable precondition of organizational commitment

PR = indicator of Partisipasion

AH = indicator of The Rule of Law

TR = indicator of Transparancy

RP = indicator of Responsiveness

BK = indicator of Consensus Oriented

K = indicator of Justice

EE = indicator of Effective and Effisiens

AK = indicator of Accountability



BS = indicator of Strategy Oriented

SPIP_LP = indicator of Control Environment

SPIP_PR = indicator of Risk Assessment

SPIP_KP = indicator of Control Activity

SPIP_IK = indicator of Information and Communication

SPIP_PPI = indicator of Monitoring of Internal Control

KMPR = indicator of Planning

KMI = indicator of Investigation

KMK = indicator of Coordination

KME = indicator of Evaluation

KMP = indicator of Controlling

KMPS = indicator of Selection Staff

KMN = indicator of Negotiation

KMPW = indicator of Representative

KOP = indicator of Contribution in the Preparation

KEP = indicator of involvement of budget preparation

ARA = indicator of Reasons for budget revision

UA = indicator of Suggestions to your boss

PA = indicator of Influence in the Final Settlement

FP = indicator of Frequency of opinion submission

RCK = indicator of Job Achievement

RK = indicator of Presence

KOID = indicator of Identification

KOKL = indicator of Involvement

KOL = indicator of Loyality

Based on the research model made, The equation for inner model can be written as follows:

KM = γ1 GG + γ2SPIP+ γ3PPA+ γ4R+ γ5KO

The equations for the reflective model outer can be written as follows:

GG = λ1PR + λ2AH + λ3TR+ λ4RP + λ5BK + λ6K+ λ7EE + λ8AK + λ9BS+ ε1

SPIP = λ10SPIP_LP+ λ11SPIP_PR + λ12SPIP_KP+ λ13SPIP_IK+λ14SPIP_PPI+ ε2

PPA = λ15KOP + λ16KEP + λ17ARA+ λ18UA + λ19PA + λ20FB+ ε3

R = λ21RCK+ λ22RK + ε4

KO = λ23KOID + λ24KOKL + λ27 KOL+ ε5

Information:

= Gamma (small), coefficient of influence of exogenous variable to endogenous variable

= Beta (small), coefficient of influence of endogenous variable to endogenous variable

= Zeta (small), galat model

= Epsilon (small), measurement error on the latent variable

5. Evaluation Model

a. Evaluation of the measurement model or models outer performed to assess the validity and reliability of

the model. Outer models with reflexive indicators evaluated through convergent and discriminant validity

of indicators and composite forming latent constructs realibility and combach alpha to block the indicator

(Chin, 1998, in Ghozali and Latan, 2014 (2014; 73)

b. inner structural model evaluation models aim to predict the relationship between latent variables. Inner

models evaluated by looking at the magnitude of the percentage of variance explained by looking at the

value of R-Square for endogenous latent constructs.

IV. Result Evaluation of Reflexive Measurement Model

The measurement model with reflexive indicator is evaluated through convergent validity and

discriminant validity of latent construct indicator, and composite reliability and cronbach alpha for its indicator

block (Ghozali and Latan, 2015: 87). Evaluation reflexive measurement model is done twice because some

indicators do not meet the validity and reliability requirements so that must be dropped from the model. The

results of evaluation of reflexive measurement model of this research are as follows:



Table 2. Overview Algoritma

AVE

Composite

Reliability R Square

Cronbachs

Alpha Communality Redundancy

GG 0.5 0.8

0.6 0.5

GG * KO 0.6 0.9

0.9 0.6

KM

0.7

0.3 -0.4

KO 0.6 0.8

0.7 0.6

PPA

0.4

PPA * KO 0.6 1.0

1.0 0.6

R

0.8

R * KO 0.7 0.9

0.9 0.7

SPIP

0.5

SPIP * KO 0.7 1.0

1.0 0.7

Table 3 . Outer Loadings

Source: PLS Analysis

Table 3. shows that all constructs with reflective indicators result in a loading factor greater than 0.5 which

means that all constructor indicators are valid. Validity test can also be seen from discriminant validity test. For

discriminant validity test can be seen on table cross loading below:

Table 4. Cross Loading

GG KM KO PPA R SPIP

ARA 0.013749 0.252412 0.423822 0.366891 0.014986 0.016439

BK 0.764819 0.327123 0.441141 0.389718 0.479467 0.421164

FB -0.026737 0.295295 0.213189 0.429221 0.17707 0.082689

KEP 0.37853 0.44574 0.348666 0.647895 0.177828 0.335262

KME 0.271312 0.671025 0.413923 0.428589 0.479177 0.459517

KMI 0.062269 0.534392 0.197175 0.398755 0.336085 0.264183

KMK 0.19169 0.701276 0.41954 0.482111 0.410885 0.553342

KMN 0.217472 0.222827 0.111474 0.23733 -0.222529 0.247133

KMP 0.260753 0.607168 0.490281 0.305155 0.463502 0.244117

KMPR 0.323213 0.781525 0.442329 0.582726 0.521852 0.321745

KMPS 0.291219 0.428093 0.472068 0.201453 0.286297 0.339846

KMPW 0.088992 0.551948 0.543843 0.388486 0.223561 0.138806

KOID 0.303258 0.519241 0.810542 0.365921 0.397266 0.418001

KOK 0.401049 0.499181 0.776373 0.417426 0.470777 0.27718

KOKL 0.292942 0.422895 0.722969 0.180192 0.222299 0.330159

KOP 0.258634 0.509769 0.227433 0.740966 0.175882 0.278774

PA 0.417451 0.650109 0.390936 0.944953 0.320303 0.440677

PR 0.508132 0.298264 0.090623 0.154258 0.179696 0.323904

RCK 0.19924 0.487758 0.410782 0.312455 0.902761 0.40701

GG KM KO PPA R SPIP

ARA 0.366891

BK 0.764819

FB 0.429221

KEP 0.647895

KME 0.671025

KMI 0.534392

KMK 0.701276

KMN 0.222827

KMP 0.607168

KMPR 0.781525

KMPS 0.428093

KMPW 0.551948

KOID 0.810542

KOK 0.776373

KOKL 0.722969

KOP 0.740966

PA 0.944953

PR 0.508132

RCK 0.902761

RK 0.883416

RP 0.719833

SPIP_IK 0.940262

SPIP_KP 0.545738

SPIP_LP 0.814172

SPIP_PP

I0.643853

SPIP_PR 0.664014

TR 0.697927

UA 0.274543



RK 0.33572 0.477304 0.449424 0.183097 0.883416 0.298306

RP 0.719833 0.245669 0.390337 0.1994 0.184609 0.441756

SPIP_IK 0.546856 0.537088 0.477874 0.360621 0.410376 0.940262

SPIP_KP 0.603474 0.31173 0.360009 0.23612 0.483899 0.545738

SPIP_LP 0.654805 0.465062 0.294517 0.622144 0.374806 0.814172

SPIP_PPI 0.57299 0.367775 0.292829 0.305474 0.308378 0.643853

SPIP_PR 0.517219 0.379292 0.381985 0.441393 0.292433 0.664014

TR 0.697927 0.285748 0.241585 0.432896 -0.088987 0.509462

UA 0.177094 0.188879 0.17639 0.274543 0.248226 0.048469


Based on Table 4. above can be concluded that each indicator that exist in a latent variables have

differences with indicators in other variables indicated by higher loading scores in its own construct so it can be

concluded that the valid model because it meets discriminant validity.

In addition to the validity test, a measurement model is also performed to test the reliability of a

construct. Reliability test is performed to prove the accuracy, consistency and accuracy of the instrument in

measuring the construct. To measure the reliability of a construct with reflexive indicators can be done in two

ways: Cronbachs Alpha and Composite Reliability are often called Dillon-Goldstein's (Ghozali and Latan, 2015:

75).

Table 2. above shows that the AVE value generated by the construct with reflexive indicator is above

0.50 so that it meets the reliability requirements. The value of the resulting cronbachs alpha construct below 0.7

so it can be concluded that the constructor indicator is not reliable. Nevertheless, the value of alpha cronbachs

generated by PLS is slightly under estimate so it is preferable to use composite reliability or Dillon-Goldstein's

(Ghozali and Latan, 2015: 102). Composite reliability value of construct constructed construct very well that is

above 0,70 so it can be concluded that construct indicator is reliable or fulfill reliability test.

Evaluation of Formative Measurement Model

The output test results formative measurement model as in the table below :

Tabel 5. Total Effect (Mean, STDEV, T-Values) Original

Sample (O)

Sample Mean

(M)

Standard

Deviation (STDEV)

Standard

Error (STERR)

T Statistics

(|O/STERR|)

ARA -> PPA 0.082706 0.108037 0.148506 0.148506 0.556923

FB -> PPA -0.095498 -0.103594 0.179076 0.179076 0.53328

KEP -> PPA 0.053441 0.073807 0.191416 0.191416 0.27919

KME -> KM 0.267933 0.187042 0.142893 0.142893 1.875063

KMI -> KM 0.123412 0.124543 0.099938 0.099938 1.234889

KMK -> KM 0.149524 0.15746 0.138144 0.138144 1.08238

KMN -> KM 0.391012 0.293264 0.161293 0.161293 2.424231

KMP -> KM 0.370702 0.391202 0.148843 0.148843 2.49056

KMPR -> KM 0.401786 0.339136 0.23013 0.23013 1.745911

KMPS -> KM 0.045306 0.094532 0.105885 0.105885 0.427876

KMPW -> KM 0.006875 0.038989 0.160345 0.160345 0.042878

KOID <- KO 0.466039 0.467881 0.07972 0.07972 5.845939

KOK <- KO 0.448035 0.445569 0.064677 0.064677 6.92724

KOKL <- KO 0.379565 0.366667 0.073365 0.073365 5.173638

KOP -> PPA -0.138759 -0.251157 0.378448 0.378448 0.366654

PA -> PPA 1.244116 1.233315 0.231779 0.231779 5.367689

RCK -> R 0.583538 0.463889 0.302174 0.302174 1.931134

RK -> R 0.535653 0.608984 0.240459 0.240459 2.227623

SPIP_IK -> SPIP 0.726288 0.676883 0.203983 0.203983 3.560528

SPIP_KP -> SPIP -0.208762 -0.11683 0.234704 0.234704 0.889468

SPIP_LP -> SPIP 0.348996 0.283849 0.258812 0.258812 1.348454

SPIP_PPI -> SPIP 0.192027 0.200955 0.119731 0.119731 1.603822

SPIP_PR -> SPIP 0.035013 0.02847 0.179657 0.179657 0.194886

UA -> PPA -0.352566 -0.336879 0.14416 0.14416 2.44565




Based on Table 5. above, it can be seen that the PPA construction indicators, ie ARA, FB, KEP, KOP,

PA and UA each produce a weight value of 0.082, -0.095, 0.053, -0.138, 1.244 and -0.352 with a T statistics of

0.556, 0.533, 0.279, 0.366, 5.637 and 2.445 so it can be concluded there are two valid indicators (PA and UA)

as PPA construct gauge because it has a statistical T value greater than 1.65. The SPIP construction indicators

SPIP_IK, SPIP_KP, SPIP_LP, SPIP_PPI and SPIP_PR each produce weight values of 0.726, -0.208, 0.348,

0.192 and 0.035 with T statistics 3.560, 0.889, 1.348, 1.603, and 0.194 values so it can be concluded that one

valid SPIP_IK indicator as a SPIP construct gauge because it has a statistical T value greater than 1.65. The

construct indicators R are RCK and RK, each yielding the weight value of 0.583 and 0.535 with the statistics T

statistics 1.931 and 22227 so it can be concluded that all indicators (RCK and RK) are valid as constructors' R

measure because it has a statistical T value greater than 1.65.

While the KME construction indicators KME, KMI, KMK, KMN, KMP, KMPR, KMPS and KMPW

each yield the weight value of 0.267, 0.123, 0.149, 0.391, 0.370, 0.401, 0.045 and 0.006 with the T statistics

1.875, 1.242, 1.082, 2.424, 2.490, 1.754, 0.427 and 0.042 so it can be concluded that the KME, KMN, KMP and

KMPR indicators are valid as a KM construct gauge because it has a statistical T value greater than 1.65. The

KOID, KOK and KOKL construct indicators each produce a weighted value of 0.466, 0.448 and 0.379 with T

statistics of 5.845, 6.927 and 5.173 227 so it can be concluded that all indicators (KOID, KOK and KOKL) are

valid as constructors KO because it has a statistical T value greater than 1.65.

Structural Evaluation Models

a. R-Square

The limit to reject and accept the proposed hypothesis is 1.65 (T-table), where if the value of T statistics> 1.65,

then the hypothesis will be accepted and otherwise will be rejected. In other words accept the null hypothesis

(H0) at the level of error 10%. The limit for R-square is 1.00. The R-square value is said to be high if it

approaches 1.00 (0.7 to 1.00), and is said to be low if it goes away from 1.00 (<0.50). R-square test output

results as shown in the table below.

Tabel. 6.R-Square

R Square

KM 0.70

KO GG

PPA

SPIP R

Based on Table 6. it can be concluded that the relationship model of all positive variables with the

value of R-square 0.70 approaching 1.00. The construct of Managerial Performance variables can be explained

by construct of variable GG, SPIP, PPA and R by 70% while 30% is explained by another variable not

examined. Variable Good Governance (GG), Government Internal Control System (SPIP), Budgetary

Participation (PPA) and Remuneration (R) enter into high category to explain Managerial Performance variable

(KM) because R-square value <0,50.

b. Goodness of Fit Index

Based on the value of communality and R2 in table 2. above, the resulting GoF Index of 0.5.

The recommended communality value = 0.50 (Fornel and Larcker, 1981) and the value of R2 small = 0.22,

medium = 0.13, and large = 0.26 (Cohen, 1988), so the GoF small = 0.10, GoF medium = 0.25, GoF large =

0.36 (Ghozali and Latan, 2015: 83), then the model in this study fall into the large category, because the GoF

index is between above 0.36.

c. Hypothesis Test

To test the proposed hypothesis, it can be seen from the amount of T-statistics obtained from the bootstrapping

result. Summary of hypothesis testing results can be seen in Table 7. below this.

Tabel 7.Total Effect (Mean, STDEV, T-Values)

Original Sample (O)

Sample Mean (M)

Standard

Deviation

(STDEV)

Standard

Error

(STERR)

T Statistics (|O/STERR|)

GG -> KM -0.746039 -0.583472 0.431203 0.431203 1.730133

GG * KO -> KM 1.258902 0.90363 0.724211 0.724211 1.738308

KO -> KM -0.273429 -0.042711 0.40972 0.40972 0.667356



PPA -> KM 0.530799 0.49848 0.092173 0.092173 5.758743

PPA * KO -> KM -0.066912 -0.057769 0.086678 0.086678 0.771955

R -> KM 0.098786 0.200506 0.429428 0.429428 0.230042

R * KO -> KM 0.356641 0.196259 0.666276 0.666276 0.535275

SPIP -> KM 0.360685 0.329664 0.132924 0.132924 2.713457

SPIP * KO ->

KM -0.591494 -0.462578 0.26972 0.26972 2.192992


Tabel 8Conclusion Hypothesis Testing

No. Hypothesis Hypothesis Statement t-Value Conclusion

1. H1 GG -> KM 1.730133 Accepted

2. H2 SPIP -> KM 2.713457 Accepted

3. H3 PPA -> KM 5.758743 Accepted

4. H4 R -> KM 0.230042 Rejected

5. H5 GG * KO -> KM 1.738308 Accepted

6 H6 SPIP * KO -> KM 2.192992 Rejected

7 H7 PPA * KO -> KM 0.771955 Rejected

8 H8 R * KO -> KM 0.535275 Rejected


Based on hypothesis testing can be summarized as follows:

1. The results of the first hypothesis testing, Good Governance has a significant positive effect on Managerial

Performance, obtained by the coefficient of estimation of -0.746 and the value of T statistics of 1.730. The

result shows that the value of T statistics is greater than the T-table value (1.65). Thus the first hypothesis

(H1) of this study is received at a level of error of 10%. So it can be concluded that Good Governance

variable has an effect on managerial performance variable;

2. The result of the second hypothesis testing, Government Internal Control System (SPIP) has a significant

positive effect on Managerial Performance, obtained the estimated coefficient value of 0.360 and the value

of T statistics of 2.713. The result shows that the value of T statistics is greater than the T-table value

(1.65). Thus the second hypothesis (H2) of this study is received at the level of error of 10%. So it can be

concluded that the variable Internal Control System Government has a significant positive effect on

Managerial Performance variables;

3. The result of the third hypothesis testing, the Budget Participation Participation has a significant positive

effect on Managerial Performance, obtained the estimated coefficient value of 0.530 and the T statistics of

5.758. The result shows that the value of T statistics is greater than the T-table value (1.65). Thus the third

hypothesis (H3) of this study is received at the level of error of 10%. So it can be concluded that the

variable participation budgeting has a significant effect on managerial performance variables;

4. The result of the fourth hypothesis testing, Remuneration has a significant positive effect on Managerial

Performance, obtained value of coefficient estimate of 0.098 and T statistics value of 0.230. The result

indicates that the value of T statistics is smaller than the T-table value (1.65). Thus the fourth hypothesis

(H4) of this study is rejected at the level of error of 10%. So it can be concluded that the variable

remuneration does not affect the variable of managerial performance.

5. The results of the fifth hypothesis testing, Organizational Commitment moderate the relationship between

Good Governance with Managerial Performance, obtained the estimated coefficient value of 1.258 and the

value of T statistics of 1.738. The result shows that the value of T statistics is greater than the T-table value

(1.65). Thus the fifth hypothesis (H5) of this study is received at the level of error of 10%. So it can be

concluded that organizational commitment can moderate the relationship between Good Governance

variable with Managerial Performance variable.

6. The results of the sixth hypothesis testing, Organizational Commitment moderate the relationship between

the Government Internal Control System (SPIP) with Managerial Performance, obtained the estimated

coefficient value of -0.591 and the value of T statistics of 2.192. The result shows that the value of T

statistics is greater than the T-table value (1.65). Although the statistical T value is greater than the T-table

value but the value is lower than the value of the test result without using organizational commitment as the

moderating variable. Thus the sixth hypothesis (H6) of this study is rejected at the level of error of 10%. So

it can be concluded that Organizational Commitment variable can not moderate the relationship between

Government Internal Control System with Managerial Performance variable.

7. The result of the seventh hypothesis testing, Organizational Commitment moderate the relationship between

Budgeting Participation with Managerial Performance, obtained the estimated coefficient value of -0.066

and the value of T statistics of 0.535. The result indicates that T statistics are smaller; of the T-table value



(1.65). Thus the seventh hypothesis (H7) of this study is rejected at the level of error of 10%. So it can be

concluded that organizational commitment variable can not moderate the relationship between budgetary

participation with managerial performance variable.

8. The results of the eighth hypothesis testing, Organizational Commitment moderate the relationship between

Remuneration with Managerial Performance, obtained the estimated coefficient value of 0.356 and the

value of T statistics of 0.535. The result indicates that the value of T statistics is smaller than the T-table

value (1.65). Thus the eighth hypothesis (H8) of this study is rejected at the level of error of 10%. So it can

be concluded that organizational commitment can not moderate the relationship between remuneration

variables and managerial performance variables.

Based on the evaluation of measurement and structural model, we can compile mathematical equations as

follows:

a. Equation of structural model (inner model)

KM = 1,730 GG + 2,713 SPIP+ 5,758 PPA + 0,230 R + 0,667 KO +

b. Equations for formative measurement models

GG = 0,764 BK + 0.508 PR + 0,719 RP + 0,697 TR

c. Equations for formative measurement models

SPIP = 0,940 SPIP_IK + 0,545 SPIP_KP + 0,814 SPIP_LP + 0,643 SPIP_PPI + 0,664 SPIP_PR

PPA = 0,366 ARA + 0,429 FB + 0,647 KEP

R = 0,902 RCK + 0,883 RK

KO = 0,810 KOID + 0,776 KOK + 0,722 KOKL

KM = 0,671 KME + 0.534 KMI + 0,701 KMK + 0,222 KMN +0,607 KMP +0,781 KMPR + 0,428 KMPS +

0,551 KMPW

V. Discussion The Effect of Good Governance on Managerial Performance

Based on the results of hypothesis testing, obtained evidence that Good Governance (GG) variable has

an effect on managerial performance variable (KM). The results of this study support the one-hypothesis (H1)

that Good Governance has an effect on managerial performance. This means that the implementation of good

governance can affect managerial performance. The results of this study are in line with the results of research

conducted by Mulyawan (2009); Amelia, et al (2012); and Susanti (2014).

Implementation of Good Governance in the implementation of bureaucratic reform is absolutely

necessary considering good governance requires good management in an organization. One of the benefits to be

gained is increased performance through the creation of better decision-making processes, improving

operational efficiency and further improving services to the public. Good governance is a form of government

accountability as an agent to society as principal.

Influence of Government Internal Control System on Managerial Performance

Based on the results of hypothesis testing,obtained evidence that the Government Internal Control

System (SPIP) variables affect the variable of Managerial Performance (KM). The results support the second

hypothesis (H2) that the Government Internal Control System (SPIP) has an effect on managerial performance.

This means that the implementation of government internal control system can affect managerial performance.

The results of this study are in accordance with the results of research conducted by Putri (2013); Rina (2012),

Sari (2011), Darma (2004), Desmiyawati and Azlina (2012) and Labni (2015).

The Influence of Budgetary Participation Participation on Managerial Performance

Based on the results of hypothesis testing, obtained evidence that the variable Participation

Arrangement Budget (PPA) effect on managerial performance variable (KM). The results of this study support

the third hypothesis (H3) that Participation Budget Arrangement (PPA) effect on managerial performance (KM).

This means that budgetary participation can affect managerial performance. Participation in budgeting in public

sector organizations plays an important role in improving organizational performance and producing high

quality decisions. This is because if the budget that is formulated / designed in a participatory manner has

accommodated all the programs contained in the work unit so as to generate a high commitment of the leaders

of the work unit to achieve organizational goals that have been established together for being involved in the

process of budget preparation.

In the goal setting theory one of the factors influencing goal setting is participation where the

participative management idea lies in the idea of involving employees in setting goals and making decisions,

thus encouraging employees to develop goals and having initiatives to obtain information about what is



happening in elsewhere in the organization. In this way, employees feel confident that the organization's overall

goals are consistent with its vision and mission.

This is also corroborated by Brownell and Mc's research. Innes (1986) stating that the participation of

all levels of management from the budgeting process to budget execution can have a positive effect on the

achievement of organizational objectives. The results of this study are in line with the results of research

conducted by Kenis (1979), Sumarno (2005), Sardjito and Muntaher (2007), Soetrisno (2010), Fibrianti and

Riharjo (2013), Kewo (2014), Baiq (2015) and Denny (2015)

The Effect of Remuneration on Managerial Performance

Based on the results of hypothesis testing, obtained evidence that variable Remuneration (R) does not

affect the variable of Managerial Performance (KM). The results of this study contradict the third hypothesis

(H4) that Remuneration (R) has an effect on managerial performance (KM). This means that remuneration can

not affect managerial performance. The results of this study are in line with the results of research conducted by

Arumawan and Sutikno (2015) but contrary to the results of research Palagia et al (2012). This is possible

because in this study only use 2 indicators based on Permendikbud Number 14 Year 2016 that is work

achievement and attendance whereas previous research use 4 indicator.

The results of this study are not relevant to goal setting theory where one of the factors affecting goal

settings is feedback. Feedback provides an opportunity for employees to improve performance and gain

recognition. This is due to the phenomenon that the bureaucracy reformation is more viscous in the essence of

remuneration rather than focusing on improving its performance. Such a phenomenon will become

commonplace when every agency has a bureaucratic reform scheme to pursue remuneration that supposedly will

trigger the performance of government bureaucracy instead of focusing on improving its performance. If the

phenomenon becomes a legitimacy for government administrators or government bureaucracy will be contra

productive, when not offset by making significant changes to the organization so that the remuneration does not

fully improve the performance of the organization.

Organizational Commitment moderates the relationship between Good Governance and Managerial

Performance

Based on the results of hypothesis testing, obtained evidence that Organizational Commitment (KO)

variable can moderate the influence of Good Governance (GG) with Managerial Performance (KM). The results

of this study support the fifth hypothesis (H5) that Organizational Commitment (KO) can moderate the

relationship between Good Governance (GG) and Managerial Performance (KM). It is shown from the data

processing where T statistics has increased from 1.730 to 1.738 after moderated by Organizational Commitment.

The successful implementation of Good Governance in the implementation of bureaucratic reform

should be accompanied by adequate organizational commitment. In public sector organizations, the commitment

of employees is implemented in the implementation of the work program that has been determined. Based on

goal setting theory, employees who are highly committed to the organization will be more concerned with the

interests of the organization than personal interests.

Organizational Commitment moderates the relationship between the Government's Internal Control

System and Managerial Performance

Based on the results of hypothesis testing, obtained evidence that Organizational Commitment (KO)

variable can moderate the influence between Government Internal Control System (SPIP) with Managerial

Performance (KM). The results on T statistics show that the indices of t count 2.192> 1.65 which means that

organizational commitment moderate the influence of SPIP on Managerial Performance so as to support the

sixth hypothesis (H6). The results of this study differ from the results of research conducted by Darma (2004)

and Desmiyawati and Azlina (2012).

Organizational Commitment moderates the relationship between Budgetary Participation with

Managerial Performance

Based on the result of hypothesis testing, it is found that Organizational Commitment (KO) variable

can moderate the relationship between Participation Budget Arrangement (PPA) with Managerial Performance

(KM). The results of this study do not support the seventh hypothesis (H7) that Organizational Commitment

(KO) can moderate the influence of Budgetary Participation (PPA) on Managerial Performance (KM). The

results of this study differ from the results of research that has been done by Sardjito and Muntaher (2007)

where the results of his research concluded that there is a significant influence between organizational

commitment variable in moderating the participation of budget preparation with the performance of local

government apparatus. The results of this study through testing the third hypothesis (H3) indicates that

organizational commitment is not able to moderate the influence of budgetary participation on managerial



performance where the value of t arithmetic influence of budgeting participation on managerial performance of

5.758743 but after moderated by organizational commitment show the value t count lower only of 0.771955.

Organizational Commitment moderates the relationship between Remuneration and Managerial

Performance

Based on the results of hypothesis testing,obtained evidence that the Organizational Commitment (KO)

variable does not moderate the relationship between Remuneration (R) with Managerial Performance (KM). The

results contradict the eighth hypothesis (H8) that Organizational Commitment (KO) can moderate the

relationship between Remuneration (R) and Managerial Performance (KM). The results of this study are in line

with the results of research that has been done by Sardjito and Muntaher (2007) where the results of his research

concluded that there is a significant influence between organizational commitment variable in moderating the

participation of budget preparation with the performance of local government apparatus.

VI. Conclusion This study aims to examine the influence of Good Governance, Government Internal Control System, Budgetary

Participation and Remuneration Participation on Managerial Performance by using Organizational Commitment

as a moderating variable. The sample in this research is all structural officers in 8 Technical Implementation

Unit of Directorate General of Early Childhood Education and Public Education.Test results in this study can be

concluded, among others:

1. Good Governance has an effect on managerial performance. The results show that public sector

performance has increased along with the implementation of Bureaucracy Reform in all Ministries /

Institutions. Implementation of Good Governance in the implementation of bureaucratic reform is

absolutely necessary considering good governance requires good management in an organization. One of

the benefits to be gained is increased performance through the creation of better decision-making processes,

improving operational efficiency and further improving services to the public. Good governance is a form

of government accountability as an agent to society as principal.

2. The Government's Internal Control System has a positive effect on Managerial Performance. In the

implementation of SPIP established units of Internal Control Unit (SPI) which function to monitor the

performance of work units to run effectively and efficiently and accountable in accordance with the

regulations. Implementation of SPIP to government agencies in order to strengthen performance

accountability. It shows that the application of SPIP will have an impact on the improvement of managerial

performance.

3. The participation of budget preparation has a positive effect on managerial performance. This is in line with

the goal setting theory that is one of the factors affecting goal setting is participation where the participative

management idea lies in the idea of involving the employee in setting goals and making decisions, thus

encouraging employees to develop goals and having initiatives to obtain information about what happens

elsewhere in the organization.

4. Remuneration has no effect on managerial performance due to the phenomenon that the bureaucracy

reformation tone is more viscous in the essence of remuneration rather than focusing on improving its

performance. Such a phenomenon will become commonplace when every agency has a bureaucratic reform

scheme to pursue remuneration that supposedly will trigger the performance of government bureaucracy

instead of focusing on improving its performance. If the phenomenon becomes a legitimacy for government

administrators or government bureaucracy will be contra productive, when not offset by making significant

changes to the organization so that the remuneration does not fully improve the performance of the

organization. In addition, in fact the new remuneration is based on attendance levels so that it can not fully

measure employee performance.

5. Organizational commitment to moderate the relationship between Good Governance and managerial

performance indicates that organizational commitment can moderate the relationship between Good

Governance and managerial performance. The successful implementation of Good Governance in the

implementation of bureaucratic reform should be accompanied by adequate organizational commitment. In

public sector organizations, the commitment of employees is implemented in the implementation of the

work program that has been determined. Based on goal setting theory, employees who are highly

committed to the organization will be more concerned with the interests of the organization than personal

interests.

6. Organizational commitment to moderate the relationship between Government Internal Control System and

managerial performance indicates that organizational commitment can moderate the relationship between

Government Internal Control System and managerial performance.



7. Organizational commitment moderating the relationship between Budgetary Participation and managerial

performance indicates that organizational commitment can not moderate the relationship between

Budgetary Participation and managerial performance.

8. Organizational commitment to moderate the relationship between Remuneration and managerial

performance indicates that organizational commitment can not moderate the relationship between

Remuneration and managerial performance.

VII. Research Implications and Suggestions Research Implications

The results of the findings in this study have three implications, namely theoretical, practical and policy

implications. Theoretically this research implies that Good Governance, Government Internal Control System

and Budgetary Participation are factors that can influence the improvement of managerial performance. This

finding is in harmony with the Goal Setting Teory where there is a link between a person's goals and

performance. The purpose-setting theory in this study can be used to explain the behavior of both superior and

subordinate in an effort to achieve organizational goals that is achievement of good performance. Achieving

optimal performance should be supported by a robust planning process. Participation in the preparation of

budgets by all elements in government agencies can improve the performance of the organization optimally. The

Government's Internal Control System that adequately runs can help provide reasonable assurance that the

organization of activities at a government agency can achieve its objectives effectively and efficiently, reporting

the country's financial management reliably, securing state assets, and promoting compliance with laws and

regulations. A high organizational commitment creates a sense of belonging to the organization. It encourages to

carry out the job responsibly and accountably so as to improve the performance of individuals that impact on

improving organizational performance.

This study also supports the concept of Stewardship Theory, which relates to the relationship between

the government (agent) and the community (principal) in the relationship management (Stewardship). In this

connection the government must give accountability of its performance to the public through public

accountability. Public accountability can be fulfilled when government agencies have applied the principles of

Good Governance, a reliable Internal Control System and Planning involving all elements (Participation of

Budget Arrangement)

Practically, this research has implication on 8 Technical Implementation Unit in Environment

Directorate General of Early Childhood and Community Education, that is as input and consideration material

for stakeholders in making strategic decisions in an effort to improve organizational performance. The

implementation of a reliable Internal Control System has implications for more accountable and transparent

state financial management. This can be achieved if all levels of leadership have a high commitment in

organizing control activities over all activities in each agency. For the community, the results of this study can

provide an understanding and description of the importance of applying the principles of Good Governance, a

system of reliable internal control, planning involving all elements (Participation of Budgeting) and the

importance of organizational commitment as a form of government accountability to the community principal).

Suggestions

Some suggestions that can be formulated in this research are as follows:

1. Subsequent research can examine at 21 new Technical Implementation Unit in Environment Directorate

General of Early Childhood and Community Educationso that the result of research can be generalized;

2. Further research is suggested to use other variables besides organizational commitment to be used as a

moderating variable so that it will have a more significant effect;

3. Further research is expected to use other indicators on remuneration variables that are more appropriate to

the existing conditions;

4. In subsequent research in designing questionnaires can use the scale of semantic differential (7) points so as

to better reflect the respondent's thoughts on the object of research. It is expected to improve the accuracy

of the data generated;

5. Further research is suggested to add the respondents from the employee elements (Budget Compiler (

RKAKL Operators) and Internal Control Unit (SPI) members) so as to provide more objective answers.

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IOSR Journal of Business and Management (IOSR-JBM) is UGC approved Journal with Sl.

No. 4481, Journal no. 46879.

Frida Nurcahyani " The Influence Of Good Governance, Government Internal Control System,

Budgeting Participation And Remuneration On Managerial Performance with Organizational

Commitments Moderating Variable( Empirical Studies In The 8 Upt Directorate General Of

Early Childhood Education And Community Education Ministry Of Education And Culture)."

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